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CCI Approves Alphabet’s Investment in Flipkart

• ByStartupStory     |    November 27, 2024

The Competition Commission of India (CCI) has approved Google parent Alphabet’s subsidiary Shoreline International Holdings LLC to acquire a stake in Walmart-owned e-commerce giant Flipkart. The deal includes an investment by Shoreline International Holdings LLC through the subscription of shares in Flipkart Private Limited, along with an arrangement for certain services between an Alphabet affiliate and Flipkart’s subsidiary.

Shoreline International Holdings LLC is a wholly-owned subsidiary of Alphabet Inc., Google’s parent firm. It operates as a holding company and does not own or manage any Google products or services, the CCI clarified in its order.

CCI’s Observations on Flipkart

The CCI order highlighted Flipkart’s business model:
“Flipkart is a subsidiary of Walmart Inc and ultimately belongs to the Walmart Group. It is primarily engaged in the business of wholesale cash and carry of goods and providing marketplace-based e-commerce platforms to facilitate trade between customers and sellers in India,” reads the CCI order.

Alphabet’s Investment Details

Google’s investment in Flipkart is part of a nearly $1 billion funding round that Flipkart concluded in May 2024. The funding includes a $350 million investment from Alphabet’s Google, valuing Flipkart at $35-36 billion. Walmart, which holds an 85% stake in Flipkart, contributed $600 million to the same round that began in 2023.

While Flipkart had announced in May that the investment was subject to regulatory and customary approvals, the CCI order now confirms the green light for the transaction. The order noted that Google’s investment involves “an extremely small and non-controlling acquisition of shareholding” and that both companies will continue to operate independently after the deal.

CCI’s Assessment of Competitive Impact

The CCI further stated:
“Nonetheless, if the Hon’ble Commission were to assess competitive effects, its assessment should only focus on the markets that are directly implicated by the proposed transaction i.e., the market for cloud services in India,” it said in the order.

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